Retirement used to mean sitting back and putting your feet up. You could live a full life off your hard-earned, yet decent, pension. But that has all changed. Life expectancy has gone up and pensions have gone down.

With interest rates next to nothing, and the state pension just £5,587.40 per year, Britons are looking for other ways to fund their retirement. More specifically, many are turning to the potential of their biggest asset. A well-judged renovation project can breathe new life into an old building, and provide a tidy extra income for your golden years.

Take Angela and Charles Meads, owners of Apple Court, a five-bedroom house at Downton in the New Forest (£995,000, through John D Wood, 01590 677233). Thanks to their efforts, the potential buyers not only get a lovely family home but a thriving business too. A holiday cottage produces £450-£700 per week in rental income. Then there is a busy plant nursery and a beautiful 2.25-acre garden, which is open to the public.

Visit the garden website (applecourt.com), and you’ll see how Angela and Charles have created no fewer than 19 walks, all with different themes, including lime, pear and gold. No wonder the charabancs pull up in such numbers.

“Since I retired, we’ve been running the business together and have built it up substantially,” says Angela. “We get visitors from all over the place, including Austria and the Czech Republic. With a bit of help from our two daughters, we generate around £35,000 a year. It’s a real family enterprise.

“People ask what it’s like to run a business with your husband. All I can say is we each have our separate roles, which we stick to – and we’re still married, after nearly 50 years! I’m keen on flowers, but Charles is very good at electrics and all those sorts of jobs.”

Obviously they are doing something right. “The only reason we’re selling is because it’s starting to get a bit too much for us,” she says. “But the logical next step would be to apply for planning permission to convert our unused barn into accommodation. You could fit four decent-size holiday lets in there.” It would be perfect for a couple who are looking to throw themselves at a grand design. With a bit of work, the property could provide a retirement nest egg that not even George Osborne could get his hands on.

Another couple who’ve taken the plunge are Roger and Andrea Hough. Thirteen years ago they bought a three-bedroom cottage at Paston, in north Norfolk. It came with an unusual feature: a tumbledown 19th-century windmill, “It was a bit of an undertaking, but there was a certain romanticism about owning a windmill,” says Roger, 65. “The previous owner was a science teacher who had been left the property by his grandfather.

“He treated the windmill as a hobby. In other words, it leaked like a sieve. Every time it rained, the floors had to be mopped. The rotting window frames also let water in, the walls were going green and the stairs were dangerous.” Undaunted, the Houghs set about bringing the windmill (built 1825-27) up to a standard where it could be opened to the public. Window frames were removed and replaced, the mill sails were repainted and a thick layer of tar scraped from the brickwork.

Today, it is unrecognisable. What was a wreck has been transformed into a pristine visitor attraction, Stow Mill, complete with a gift shop. The potential is there for a vibrant business as well as a quirky place to live.

They are looking for offers in the region of £475,000 (01603 605510; abbotts.co.uk).

“The only problem is that in order to keep the windmill in good condition you really need to generate more income – perhaps by turning it into a holiday let,” says Roger. “Either way, we’ve done our bit, I think.”

It isn’t just homes and bank balances that are feeling the benefit, either. An increasing number of retirees are discovering that renovation is a great way to keep young. The charity Age UK says that staying active after retirement is especially important for men, who can find it hard to adjust to life without a job.

And they don’t get more active about the house than 71-year-old Peter Fenton. He has single-handedly converted Hall Stables, at Mickleham, near Dorking in Surrey. They are now on the market for £950,000 (01372 383434; fine.co.uk).

Peter started work on the stables long before he retired; 33 years ago, to be precise.

“A friend of mine bought the place originally. He was going to convert it into little Mickey Mouse-type holiday properties,” recalls Peter. “I couldn’t stand by and watch that happen. So I bought the place from him, and set about doing my own thing.

“I started by making the coachman’s cottage habitable, with a kitchen and a bathroom. From 1982 onwards, I turned my attention to the stables.”

Making use of his experience in the swimming pool construction business, he built an indoor fish pond in the middle of the stables, and a Jacuzzi in the old tack room. He also created a vast cellar, with a secret lift to access it. Not forgetting the bar, cinema and the baronial-sized fireplace.

“I call this place the fun factory, because I’ve had so much fun converting it,” says Peter. “I’ve installed a horse-shaped shower head from the QE2 [which he helped refit when it came back from Falklands War duty]. There is also an original 1790 clock from the old big house around here, Mickleham Hall. I’ve even invented a button which lets you run the bath without getting out of bed.”

As well as being fun, doing the work yourself will save you hefty labour costs. This can be key to the financial success of a conversion. Peter concedes he was often working more for love than money.

“To be honest, I never thought I’d get to the end of this job, but I think I’ve done as much here as I can,” he adds. “My new project is building a French-style chateau in Cyprus, with solar panels. I’m always looking for a new challenge.”

The Houghs too, don’t think their windmill refurbishment would have been possible had they not put in hundreds of hours themselves. For energetic retirees who want to throw themselves into a project, now is the perfect time.

House prices are at a low ebb and alternative savings are in the doldrums. With a bit of love, you could create an ideal home for your later years. And, who knows, perhaps some extra cash too?

For canny renovators, the prospect of a stylish retirement is still very much alive.

How to put your home to work

• Act early

Buy your new place before you retire. That way, the contrast won’t be so abrupt.

• Think bigger

You don’t have to downsize. Maybe buy somewhere large, with lots of potential.

• Think outbuildings

Consider properties with barns, cottages or annexes that could be converted into income-earning accommodation.

• Research the market

Find out how much rent you could earn, either from holiday or longer lets.

• Get quotes

View properties with a builder who can give you a price for conversion work.

• Are you a people person?

If you can’t stand the idea of strangers invading your privacy, don’t go for the guesthouse or holiday-let option.